Currently, imported goods with a value of 1,500 baht (US$45.80) or less are exempt from import duties, while those of higher value are subject to different rates of tax based on the type of product.

Ekniti said the new measure, which will come into effect on Jan 1 next year, will help the Thai manufacturing sector, and the government is also seeking cooperation from the operators of online commercial platforms to help collect the tax.

“The customs duties will be used to protect SMEs from cheap imported goods flooding into the country following the global trade war,” he said.

The measure will impact the e-commerce, logistics, and retail sectors, and put an additional burden on carriers that previously handled millions of non-dutiable parcels and will now need to process them for duty assessments and tax collection, according to law firm Tilleke & Gibbins.

“This policy marks a fundamental shift away from duty-free low-value cross-border e-commerce in Thailand,” it said in a note.

Last year the previous government approved the collection of 7% value-added tax (VAT) on the same category of cheap imported goods until December.

Cheap goods mostly imported from China have upended local manufacturing and businesses, contributing to a slew of factory closures and job losses, prompting businesses to call on the government to take action.